While the Crypto Currencies are around since 2009 or so, there hasn’t been a more exciting time to live in this Crypto universe.
If you recall the past year when bitcoin prices were rising from almost less than 1k dollars to about 10k+ – that was an insane jump in value which many would believe to be unpresented. However, that said many believe that it is only the beginning and the future of bitcoin values are in millions if not more.
But the monetary value of these coin isn’t the only thing that attracts so many people. The block chain technology in itself is amazing and has so many uses for the future. Being de-centralized, this concept will finally remove the powerful and the middlemen and create an environment where people can trade, transact and live a life totally free and completely honest.
Before getting into the really neat details, let me first take a minute to explain you the basics of what Crypto Currencies, blockchain or bitcoin means.
BlockChain – In the past when any transaction has to happen, someone has to keep a record of it. Or else, how will you know – who has double spent the money. With fiat currencies, it was easy – all you have to do is, trust your bank. If you are using cash then whatever you have is all that you can spend.
In a condition like this where you have to trust your Government or a central bank that controls the money, everything runs on trust of authority. This is what a centralized system looks like where someone controls it all. BlockChain is totally different from this – it is de-centralized. When you make a transaction on the blockchain, your transaction will be encrypted into a hash and the previous transactions hash will be included into it – and a miner will verify that your transaction is legit before your transaction is put on the Crypto Blockchain ledger.
I know this is too much to take in rightaway, but give it time – if possible try watching some YouTube videos that explains all these concepts in details and slowly you will start getting it all. For now, just imagine a diary with too many blocks – each block is a transaction and has records of its previous blocks transaction – connecting all the blocks that way right up to the first block – knows as the Genesis block! This way, you can’t change a block in the middle because its details are already present on the last block – one can easily spot the wrong if someone tries to edit something in an old block. This makes the entire system very transparent and secure.
Crypto Currencies and BitCoin – If you have understand a bit about blockchain from the previous point then – any currency that runs on the blockchain architecture is known as Crypto Currency. BitCoin was the first of the crypto currencies followed by LiteCoin, BitCoinCash, Etherium, Dash, Monero and several more.
BitCoin was started by a guy named Satoshi Nakamoto, this was just the name used by those who started it – so basically no one really knows if Satoshi really existed! If he did so then it is estimated that he would own about a Million Bitcoins which at present value is best left uncalculated! Technically, he was also the first person who solved the issue of double-spending in the digital currency, which was considered something impossible before the idea of blockchain came into existence.
Mining – I guess you must have understood the basics of currencies and their technology but how does the verification of the transactions happen?
This is where mining comes into play. People who participate in the mining, uses their computer’s resources to validate transactions – if you validate a bitcoin transaction then at this current rate you will earn 12.5 bitcoins. This rate goes into half every 4 years which means very soon, around 2020 – it will be 6.25 reward for validating a transaction.
If you are interested to mine Crypto Currencies then here’s how to get started. For bitcoin mining you need ASIC hardwares, the best of which are known as AntMiners that can mine at 14+ TeraHash per second! At that rate, with multiple of these miners working together you can end up with some bitcoins for sure! But do note that these ASIC hardwares are only made to mine bitcoins and are a total waste for anything else. For some other coins like Etherium which can’t be mined with Asics needs only Graphic Cards for mining. So if you make a small Rig with say 10+ Graphic cards of 4 GB each – then you can mine at 150+ MegaHashes of Eth and if for some reasons mining does not works in the future – you can still sell your graphic cards and some gamer fan will buy those at a depreciated price!
Now, let’s leave the basic at that and move on to more technical and financially important topics like Trading CryptoCurrencies, Crypto Exchanges etc.
If you have followed the coin pricing from last few years then you already know that the prices have gone up by quite a lot. These rates fluctuates on a realtime basic which makes it so attractive to the traders. For example if you had bought Etherium at $200 a piece perhaps 6 months ago then you can sell it today for a whopping $1,058.69 – but the point here is that at some point it had gone up to $1500+ which means that as much of a potential it provides for making money – it can crash and you can lose your money as well.
If you are into trading then there’s two main things you need to know, the first is which coins are going up that needs to be bought along with which coins are going down that needs to be sold. The 2nd point is to have a great exchange for crypto coin trading. Recently, I went across this Legolas Exchange that seems very promising, you can check out their white paper too.
When it comes to keeping our coins secure for the long term I like to trust coinbase or a hardware wallet, but that is only for safe keeping which does not really increase the money as much. Trading on the other hand is a great way to quickly grow your money. This really becomes even more exciting when you take into account the various ICOs that keeps happening from time to time. Think about a coin that has almost no value – it is brand new and can be bought for a very cheap rate during its ICO. Once the ICO is done and it raises some money – the value is likely to go up. This is where all the fun begins as the value of your recently bought coins start to grow at a very heavy pace.
Let me take Legolas’s own coins for example which are known as the LGO Tokens. These tokens are pretty affordable right now, what happens if you buy some and keep holding them for the future. In time the coin value will increase and the coins that you have bought for a very low price will be worth several dollars. Then you can sell them and make some very good money in the future.
This is sort of like a beginners guide but we have covered the basics well. Please do subscribe to this blog if you want to learn more about Crypto Currencies. Very soon, we will cover more of these topics in detail and there’s plenty of things to talk, so stay tuned!